What does the term "production activity"
The company activity is the process, which includes not only the production of goods or provision of services, but also financial-economic activity, logistics, sales, use of labor and material resources, equipment and technology. The enterprise – structured and a living organism.
The structure of any business includes management personnel, production Department, Finance and Economics Department of accounting and reporting. In addition, the structure can include other units, whose task is to ensure the continuous production process and manufacturing products that would be competitive and meet the quantity, quality and delivery demands of the market. Thus the basic requirement and criteria of efficiency of the company is to minimize production costs, i.e. reducing the cost of goods and services.
The factors that determine production and economic activity of the enterprise
The efficiency of production and economic activities of enterprises primarily depends on factors such as the security of production facilities, the status of production and technological base, its technical and organizational level, how the organization of production and labour meets the modern requirements of the market and the market.
Of great importance to the activities of the enterprise is of such factors as economic and financial planning. It is not only uninterrupted supply of necessary resources, but also constant control over the current activity of the enterprise operational change management solutions in order to achieve the planned results.
Control is carried out through the analysis of production and economic activity of the enterprise by comparing the main results of this activity with the calculated and planned. To the indicators characterizing the efficiency of the enterprise, for example, include:
- profit from sales of goods and services;
- total production costs;
- the level of remuneration of employees in the company of people;
- the amount of funds on settlement accounts of the enterprise;
- existing accounts payable and accounts receivable.
Advice 2 : What constitutes a business enterprise?
Each company originally created for a specific purpose, usually, is making a profit, creating jobs, development of any sphere of activity. In the process of implementation is constantly occurring events and actions that somehow relate to the production. The combination of these processes is called economic activity of the enterprise.
The concept of economic activity
Economic activity is any activity of the enterprise that is associated with the sale of goods, services and profit maximization.
Economic activity involves a complex economic processes, such as:
1. The use of the means of production. Under the means of production refers to fixed assets, depreciation, miscellaneous equipment, that is, objects that are directly involved in the process of making a profit.
2. Using objects of labor. The items include materials. Their consumption should be economical and regulated, then it will positively affect the financial result.
3. The use of labor resources; work resources are: availability of skilled labor, optimal use of working time and payroll.
4. The production and marketing of products; Here we consider the indicators of production quality, deadlines, volume of shipment, cost of the products.
5. Indicators of cost of production. Are taken into account all costs incurred in the production and sale of products.
6. The profitability indicators. Qualitative indicators of the outcome of the enterprise.
7. The financial condition of the company.
8. Other business processes.
All of these indicators are included in the concept of business enterprises and are in constant close connection and dependence, therefore, require periodic analysis and accounting.
Fixing the facts of economic activities
Most enterprises carry out their functions with the purpose of earning income. For smooth operation of all departments within a company require constant monitoring. It is necessary to conduct continuous work with documents which reflect data on all business transactions.
It is important to analyze the economic activity of the enterprise for constant monitoring on these processes. Economic activity is reflected in accounting registers and vaults:
- analysis of accounts;
- trial balance;
The main report of any company is the balance sheet. According to this document, a knowledgeable person can immediately perform the economic condition of the firm. None of the transactions made in the ordinary course of business does not pass by itself, all actions are recorded in registers and are included in the reporting, analysis and forecasting.